London pre-open: Stocks seen up amid US rate cut hopes
By Michele Maatouk
Date: Wednesday 13 Aug 2025
(Sharecast News) - London stocks were set to gain at the open on Wednesday following a record close on Wall Street, after the latest US inflation reading raised hopes of a September rate cut by the Federal Reserve.
The FTSE 100 was called to open around 25 points higher.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "Yesterday, US inflation data was mixed, but the market reaction was not. Core inflation in the US posted its strongest gains this year, and the yearly figure accelerated more than expected to 3.1% in July. However, headline inflation eased more than expected to 2.7%. Normally, core inflation is the measure the Federal Reserve (Fed) focuses on when deciding monetary policy. In that context, the market could have reacted by scaling back expectations of a September rate cut.
"But no - investors instead increased September cut expectations, thinking that imported goods inflation remained lower than feared as companies continued to absorb tariff costs. As a result, the US 2-year yield fell after the data release, the probability of a September cut jumped to 94% from 80% beforehand, and the US dollar slipped back below its 50-DMA. The index had already reversed its summer uptrend last week, the game is on for further US dollar weakness. There is still one more set of PCE, jobs, and CPI data before the next decision (even though the new BLS chief is reportedly willing to pause the monthly jobs releases). Still, the odds favour a 25bp Fed cut in September.
"The story doesn't end there. US Treasury Secretary Scott Bessent is now calling for a jumbo rate cut in September - a 50bp move would help offset US jobs weakness caused by trade policies."
In corporate news, housebuilder Persimmon said it still expected to deliver between 11,000 and 11,500 completions for the full year despite challenging market conditions and the prospect of tax rises in October's Budget.
The company said its private forward order book was up 11% to £1.25bn, while underlying pre-tax profits for the six months to June were also up 11%, to £165m.
Specialist insurer Beazley reported a mixed set of first-half results, with solid premium growth offset by a sharp drop in profitability and margin compression.
Insurance written premiums increased 2.04% year-on-year to $3.18bn, driven by continued expansion in its cyber and property lines, while pre-tax profits fell 45% to $502.5m, reflecting higher claims activity and a less favourable investment backdrop.
Construction and infrastructure products group Hill and Smith announced a £100m share buyback programme after reporting strong cash generation and a double-digit increase in underlying profits in the first half.
Underlying operating profit totalled £73.5m over the six months to 30 June, up 11% at constant currencies, with revenues up 4% at £413.6m.
"Our second half outlook remains positive, underpinned by continued growth in our US end markets," said chief executive Rutger Helbing.
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